天津意大利中小企业产业园
La Zona Industriale per Le Piccole
e Medie Imprese Italiane a Tianjin

Tianjin Italian SME Industrial Park

Current Position: Home>Investment Policies>Tax Incentives
  • Enterprises may apply for state tax incentives including, but not limited to, the following:

    1.  Industrial and Commercial Tax Incentives

    1.1  Elimination of Double Taxation

    Purpose: To eliminate double taxation of income

    Beneficiaries: Foreign-invested enterprises and individuals

    Applicable Conditions: Foreign resident enterprises and individuals pay tax in China

    Main Content: Income obtained by Italian residents, which can be taxed in China in accordance with the provisions of this Agreement, may also be included in the tax base on which Italy is taxed in accordance with the applicable Italian law. In this case, Italy should allow the tax amount paid in China to be deducted from the tax calculated in accordance with the above method, but the deduction shall not exceed the above-mentioned Italian tax payable according to the proportion of the above-mentioned income in the total income.

    Released by: Government of the PRC and government of the Italian Republic

    Incentive Basis: Agreement of the Government of the PRC and Government of the Italian Republic on Elimination of Double Taxation and Preventing Tax Avoidance

    Valid through: Currently effective

    1.2  Deferred Tax Payment on Foreign Investors' Reinvestment

    Purpose: To encourage reinvestment by foreign investors

    Beneficiaries: Foreign-invested enterprises

    Applicable Conditions:

    Foreign investors invest directly by distributed profits

    Main Content: The withholding income tax of distributed profits from domestic resident enterprises to foreign investors and used for directly reinvesting will not be levied for the present.

    Released by: Ministry of Finance, State Administration of Taxation, National Development and Reform Commission, Ministry of Commerce

    Incentive Basis: Notice on Expanding the Scope of Application of the Temporarily Non-levied of Withholding Income Tax Policies for Foreign Investors' Distribute Profits Used for Direct Investment (Caishui [2018] No. 102)

    Valid through: Currently effective

    1.3  Preferential Income Tax rate for High-tech Enterprises

    Purpose: To support the development of high-tech enterprises

    Beneficiaries: high-tech enterprises

    Applicable Conditions:

    The enterprises identified as high-tech enterprises in accordance with the Notice of the Ministry of Science and Technology, the Ministry of Finance and the State Administration of Taxation on Revising and Issuing the Measures for the Administration of Confirmation of High-tech Enterprises (Guoke Fahuo [2016] No. 32)

    Main Content: The enterprise income tax shall be levied at a reduced tax rate of 15% for high-tech enterprises requiring the state's necessary support.

    Released by: National People's Congress

    Incentive Basis: Enterprise Income Tax Law of the People's Republic of China

    Valid through: Currently effective

    1.4  Preferential Income Tax Rate for Technically Advanced Service Enterprises

    Purpose: To encourage foreign investors to invest in high technology, high value-added service industry, and accelerate enterprises' technology innovation and promote technical service capacity

    Beneficiaries: Technically advanced service enterprises

    Applicable Conditions:

    (1) Technically advanced service enterprises shall meet the following conditions at the same time:(1) Legal personality enterprises registered in China (Excluding Hong Kong, Macau, Taiwan)

    (2) Enterprises engaged in one or more technically advanced service businesses included in the Scope of the Affirmation to Technically Advanced Service Businesses (for Trial Implementation), using advanced technology or have good R&D capabilities.

    (3) More than 50% of the employees hold college degrees or above.

    (4) The revenue of technically advanced service businesses included in the Scope of the Affirmation to Technically Advanced Service Businesses (for Trial Implementation) shall be more than 50% of the year's enterprise total income.

    (5) The revenue of offshore service outsourcing business shall be no less than 35% of the enterprise's total income of the year.

    Main Content:

    (1) The enterprise income tax of identified technically advanced service enterprises is levied at a reduced tax rate of 15%.

    (2) For the educational expenditure of employees of the identified technically advanced service enterprises, the part within 8% of the total salary amount is allowed to be deducted when calculating income tax payable, and the exceeding part is allowed to be carried forward and deducted in the following tax years.

    Released by: Ministry of Finance, State Administration of Taxation, Ministry of Commerce, Ministry of Science and Technology, National Development and Reform Commission

    Incentive Basis: Notice on Promoting Technically Advanced Service Enterprises Income Tax Policy across Country (Caishui [2017] NO.79)

    Valid through: Currently effective

    1.5  Extension of the Loss Carry-over Years for High-tech Enterprises and Technological SMEs

    Purpose: To support the development of high-tech enterprises and technological SMEs

    Beneficiaries: high-tech enterprises and technological SMEs

    Applicable Conditions:

    (1) The high-tech enterprises refer to the enterprises that identified under the conditions required by the Notice of the Ministry of Science and Technology, Ministry of Finance and State Administration of Taxation on Revising and Issuing the Administrative Methods for the Confirmation of New and High Technology Enterprises (Guokefahuo [2016] NO.32).

    (2) The technological SMEs refer to the enterprises that acquire registration number of technological SMEs under the conditions required by the Notice of the Ministry of Science and Technology, Ministry of Finance and State Administration of Taxation on Printing and Distributing the Administrative Methods for the Evaluation of Technological Small and Medium Enterprises (Guokefahuo [2017] NO.115)

    Main Content: From 1 January 2018, for the qualified high-tech enterprises and technological SMEs of the year, the losses have not been made up occurred in fives years before the enterprises acquire qualification is allowed to be carried forward and made up in future years, and the longest carry-forward period is extended from 5 to 10 years.

    Released by: Ministry of Finance, State Administration of Taxation

    Incentive Basis: Notice on the Extension of the Period for Carrying Forward Losses for High-tech Enterprises and Small and Medium-sized Technological Enterprises (Caishui [2018] No. 76)

    Valid through: Currently effective

    1.6  Full Refund of VAT on Purchasing Domestic Manufactured Equipment of Foreign Investment R&D Centers

    Purpose: To encourage scientific research and technological development and promote scientific progress

    Beneficiaries: Foreign investment R&D Centers

    Applicable Conditions: The following conditions should be met at the same time:

    (1) R&D expense standard: Total investment is no less than 8 million US dollars of the enterprises as independent legal personality, and the R&D investment is no less than 8 million US dollars of enterprises' internal department or branch.

    (2) Full-time research and experimental development personnel are no less than 150.

    (3) The accumulated original value of equipment since the establishment is no less than 20 million yuan.

    Main Content: Full refund of value-added tax on purchasing domestic manufactured equipment of foreign investment R&D centers.

    Released by: Ministry of Finance, General Administration of Customs, State Administration of Taxation

    Incentive BasisAnnouncement on Continuing the Implementation of Value-added Tax Policies for the Purchase of Equipment by Research and Development Institutions (Announcement No. 91 [2019] of Ministry of Finance, Ministry of Commerce and State Taxation Administration)

    Valid through: 31 December 2023

    1.7  CIT Credits of Investment on Environmental Protection, Energy and Water Saving, and Safety Production Equipment

    Purpose: To encourage the development of the environmental protection industry

    Beneficiaries: Domestic and foreign enterprises

    Applicable Conditions: The equipment purchased by enterprises is included in the Catalogue of Enterprise Income Tax Preferences for Particular Equipment of Environmental Protection, the Catalogue of Enterprise Income Tax Preferences for Particular Equipment of Energy and Water Saving, the Catalogue of Enterprise Income Tax Preferences for Particular Equipment of Safety Production.

    Main Content: Enterprises who purchase and use the state-specified environmental protection, energy and water-saving, and safety production equipment, their 10% of equipment investment amount shall be deducted from enterprise income tax payable.

    Released by: Ministry of Finance

    Incentive Basis: Notice of State Administration of Taxation on Executing the Catalogue of Enterprise Income Tax Preferences for Particular Equipment of Environmental Protection, the Catalogue of Enterprise Income Tax Preferences for Particular Equipment of Energy and Water Saving, the Catalogue of Enterprise Income Tax Preferences for Particular Equipment of Safety Production (Caishui 2008 NO.48).

    Valid through: Currently effective

    1.8  Preferential CIT Exemption and Reduction for Energy-saving Service Enterprises

    Purpose: To reduce the tax burden of enterprises

    Beneficiaries: Domestic and foreign enterprises

    Applicable Conditions: Energy-saving service companies that implement energy-saving benefit-sharing and contract energy management projects, implement taxation on auditing and meet the prescribed conditions.

    Main Content: Starting from the tax year in which the project obtains the first production and operation income, the corporate income tax will be exempted from the first to the third year and reduced 50% at the statutory rate of 25% for the fourth to the sixth year.

    Released by: State Administration of Taxation, National Development and Reform Commission, Ministry of Finance

    Incentive Basis: Notice on Promoting the Development of Energy-saving Service Industry Value-added Tax, Business Tax and Enterprise Income Tax Policy Issues (Cai Shui [2010] No. 110)

    Valid through: Currently effective

    1.9  VAT Deduction for Production and Living Service Industries

    Purpose: To reduce the tax burden of enterprises

    Beneficiaries: Domestic and foreign enterprises

    Applicable Conditions: Enterprises of production and living service industry

    Main Content: The taxpayers in the production and living service industry are allowed to add 10% of the current deductible input tax to deduct the tax payable.

    Released by: Ministry of Finance, State Administration of Taxation, General Administration of Customs

    Incentive Basis: Announcement on Deepening the Relevant Policies of Value-Added Tax Reform (Ministry of Finance, the State Administration of Taxation, and the General Administration of Customs Announcement No. 39, 2019)

    Valid through: 31 December 2021

    1.10  R&D Expenses of Enterprises Except for Manufacturing Industries are Deductible at 75%

    Purpose: To encourage enterprises to increase R&D investment and support technical innovation.

    Beneficiaries: Enterprises other than manufacturing and not in the tobacco manufacturing, accommodation and catering, wholesale andretail, real estate, rental and business services, or entertainment industries

    Applicable Conditions: Actual expenses arising from R&D activities

    Main Content: Based on the actual incurred and substantiated deductions in the R&D activities carried out by theenterprise, a further 75% of the actual incurred amount shall be deductedbefore tax; where intangible assets are formed, 175% of the cost of theintangible assets shall be amortized before tax in the mentioned period.

    Released by: Ministry of Finance, State Administrationof Taxation, Ministry of Science and Technology

    Incentive Basis: Noticeof Ministry of Finance, StateAdministration of Taxation, Ministry of Science and Technology on Increasingthe Percentage of Pre-tax Deduction for Research and Development Expenses (CaiShui [2018] No.99), Announcement of the Ministry of Finance, State Administration of Taxation, onExtending the Implementation Period of Some Tax Preferential Policies(Announcement of the Ministry of Finance and the State Administration of Taxation No. 6 of 2021)

    Valid through: 31 December 2023

    1.11  The Percentage of R&DExpenses of Manufacturing Enterprises Increased to 100%

    Purpose: To encourage enterprises to increaseR&D investment and support technical innovation.

    Beneficiaries: manufacturing enterprises

    Applicable Conditions: Actual expenses arising from R&D activities

    Main Content: For R&D expenses actually incurred bymanufacturing enterprises in carrying out R&D activities, if they do notform intangible assets and arecharged to current profit or loss, they shall bededucted on the basis of actual deduction in accordance with the regulations,and from 1 January 2021, they shall be further deducted before tax at 100% ofthe actual amount incurred; if they form intangible assets, they shall beamortized before tax at 200% of the cost of the intangible assets from 1January 2021.

    Released by: Ministry of Finance, State Administrationof Taxation

    Incentive Basis: Announcementof the Ministry of Finance and the State Administration of Taxation on FurtherImproving the Policy on Pre-tax Deduction of R&D Expenses (No. 13 of 2021)

    Valid through: Currently effective

    1.12  Reduction of Enterprise IncomeTax for Small and Micro-profit Enterprises

    Purpose: To further support the development of smalland micro-profit enterprises.

    Beneficiaries: Small and micro-profit enterprises(Enterprises engaged in industries that are not restricted or prohibited by theState and that meet the three conditions of having an annual taxable income ofnot more than RMB 3 million, a workforce of not more than 300 and total assetsof not more than RMB 50 million)

    Applicable Conditions: From 1 January 2021 to 31 December 2022,the annual taxable income of small and micro-profit enterprises will not exceedRMB 1 million

    Main Content: From 1 January 2021 to 31 December 2022,the portion of the annual taxable income not exceeding RMB 1 million of smalland micro-profit enterprises will be reduced by 12.5% of the taxable income andsubject to corporate income tax at a rate of 20%.

    Released by: Ministry of Finance, State Administrationof Taxation

    Incentive Basis: Announcementof the State Administration of Taxation on Matters Relating to theImplementation of Preferential Income Tax Policies in Support of theDevelopment of Small and Micro Profit Enterprises and Individual Entrepreneurs (State Administrationof Taxation Announcement No. 8 of 2021)

    Valid through: 31 December 2023

    1.13  VAT Closing Credit Refund forSmall and Micro-profit Enterprises and Manufacturing Enterprises

    Purpose: To support the high-quality development of small and micro-profitenterprises and manufacturing enterprises.

    Beneficiaries: Small and micro-profit enterprise andmanufacturing enterprise taxpayers

    Applicable Conditions:The following conditions should be met:
    (1) Tax credit rating A or B
    (2) No fraudulent retention of tax refunds, export refunds,or fraudulent issuance of special VAT invoices had occurred in the 36 monthsprior to the application for tax refund
    (3) Not been penalized twice or more by the taxauthorities for tax evasion in the 36 months prior to the application for taxrefund
    (4) Not covered by the levy-and-refund, levy-before-refundpolicy since 1 April 2019

    Main Content: 
    (1) The State has extended the scope of the policy of fullmonthly refund of incremental VAT retention tax credit for advancedmanufacturing industries to eligible small and micro-profit enterprises andrefunded a one-off amount of retained tax credits for the stock of small andmicro-profit enterprises.
    (2) The State has extended the scope of the policy on fullmonthly refund of incremental VAT retention tax credit for advancedmanufacturing industries to eligible enterprises in manufacturing and otherindustries, and refunded a one-off amount of retained tax credits for the stockof enterprises in manufacturing and other industries.

    Released by: Ministry of Finance, State Administration of Taxation

    Incentive Basis: Announcementof the Ministry of Finance and the State Administration of Taxation on FurtherIncreasing the Implementation of the Policy of Retained Tax Refund at the VATClosing Period (Ministry of Finance and the State Administration of TaxationAnnouncement No. 14 of 2021)

    Valid through: 31 December 2023

    1.14  CIT Deduction for Purchasing Equipment and Instruments

    Purpose: To encourage enterprises to increase the investment in equipment and instruments

    Beneficiaries: Domestic and foreign-invested enterprises

    Applicable Conditions: For the enterprises that newly purchased equipment and instruments from 1January 2018 to 31 December 2023.

    Main Content: The equipment and instruments with unit value not exceeding RMB 5 million are allowed to be included in the costs and expenses of the current period, can be deducted when computing the enterprise's taxable income amount, and are not required to be depreciated over the years.

    Released by: Ministry of Finance, State Administration of Taxation

    Incentive Basis: Notice of Ministry of Finance and State Administration of Taxation on Deduction of Equipment and Instruments Related Corporate Income Tax Policy (Cai Shui [2018] No. 54), Announcement of Ministry of Finance and State Administration of Taxation on Extending the Implementation of Some Preferential Tax Policies (Ministry of Finance, and the State Administration of Taxation Announcement [2021] No. 6)

    Valid through: 31 December 2023


    2.  Customs Duties Preferences

    2.1  Tax Exemption on Equipment of Encouraged Foreign Investment Projects

    Purpose: To reduce the tax burden of foreign investors

    Beneficiaries: Foreign-invested enterprises

    Applicable Conditions: The foreign-invested projects included in the scope of the Catalogue of Encouraged Foreign Investment Industries (2020 edition)

    Main Content: Customs duties shall be exempted on the self-use equipment imported within total investment and accessories, spare parts along with the equipment according to the contract, except for those listed in the Catalogue of non-exempted Imported Commodities of Foreign Investment Projects and Catalogue of Imported Major Technical Equipment and Products not exempted for taxes.

    Released by: the State Council, General Administration of Customs

    Incentive Basis: Notice of the State Council on Adjusting the Tax Policy of Imported Equipment (Guofa [2018] NO.37), General Administration of Customs Announcement [2008] No. 103, and General Administration of Customs Announcement [2019] No. 125.

    Valid through: Currently effective

    2.2  Bonded Imported Materials of Processing Trade

    Purpose: To encourage the development of processing trade and reduce the operational burden of enterprise

    Beneficiaries: Foreign-invested enterprises

    Applicable Conditions: Foreign-invested enterprises develop processing trade. Processing trade refers to the business activities in which operating companies import all or part of the raw and supplementary materials, parts, components, and packaging materials (hereinafter collectively referred to as materials), and the finished products are re-exported after processing or assembling, including processing with supplied materials and processing with imported materials.

    Main Content: Imported materials and parts under the processing trade are subjected to bonded supervision. After the processed products are exported, the customs will write off according to the actual processed and re-exported quantity. For the levied duties on importing as regulated, the Customs will refund the levied duties according to the actual processed and re-exported quantity after the processed products are exported. Processing trade includes processing with supplied materials and processing with imported materials.

    Released by: General Administration of Customs

    Incentive Basis: According to the Measures of the Customs of the People's Republic of China on the Supervision of Processing Trade Goods (General Administration of Customs Order No. 219)

    Valid through: Currently effective

    2.3  Tax Exemption in Bonded Area

    Purpose: To reduce the investment cost

    Beneficiaries: Enterprises in the bonded area

    Applicable Conditions:

    (1) Enterprises with legal personality

    (2) Business sites are in the bonded area

    Main Content: Customs duties or import links taxes are exempted on goods and infrastructure materials, and equipment, office supplies that enter the zone from abroad.

    Released by: General Administration of Customs

    Incentive Basis: Measures of the PRC for the Customs Comprehensive Bonded Zone (Order No. 256)

    Valid through: Currently effective

    2.4  Exemption of Quota and License Management in Bonded Area

    Purpose: To facilitate the trade in goods

    Beneficiaries: Enterprises in the bonded area

    Applicable Conditions:

    (1) Enterprises with legal personality

    (2) Business sites are in the bonded area

    Main Content: Goods entering and leaving between the bonded port area and overseas are not subject to import and export quota and license management.

    Released by: General Administration of Customs

    Incentive Basis: Measures of the PRC for the Customs Comprehensive Bonded Zone (Order No. 256)

    Valid through: Currently effective

    2.5  Bonded Treatment in Bonded Area

    Purpose: To promote free trade

    Beneficiaries: Enterprises in the bonded area

    Applicable Conditions:

    (1) Enterprises with legal personality

    (2) Business sites are in the bonded area

    Main Content: The Customs implement a record-keeping system for goods entering and leaving between the bonded port area and overseas. Goods are bonded after entering the bonded port area from abroad.

    Released by: General Administration of Customs

    Incentive Basis: Measures of the PRC for the Customs Comprehensive Bonded Zone (Order No. 256)

    Valid through: Currently effective


    Note: The language used herein has been simplified and rephrased. The above information does not cover the entire content of relevant laws and regulations. You should not act upon the above information without obtaining your own independent professional advice.

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